Solar energy systems used for heating or cooling: out-of-pocket expenditures by the owner for the components and labor
Wind, hydroelectric, geothermal, solar thermal, solar PV, and other solar energy systems: the assessed value of the system

Summary

Systems that generate energy using wind, hydropower or geothermal resources are exempt from property tax as are solar energy heating or cooling systems*. Systems using solar power devices—including solar thermal, photovoltaic (PV), and other solar energy—are exempt from property tax only if they were installed after December 31, 2011. For most eligible renewable energy systems the assessed value of the system is exempt from property tax. One exception is solar energy heating or cooling systems which are exempt from property tax the amount equal to the out-of-pocket expenditures for the components and labor associated with the system. The property tax exemption applies to both real property and mobile homes equipped with renewable energy systems and may only be claimed by property owners.

The property tax exemption is allowed every year that a qualifying system functions. Under H.B. 1234, renewable energy systems installed after December 31, 2014 are no longer eligible for a property tax exemption if the ownership of the property changes.

Public utilities and other electricity retailers (excluding net metered customers) may not claim a property tax exemption for wind or solar power devices.

Property owners that wish to claim this deduction must fill out Form 18865and file it with the local county auditor. Questions about this incentive should be directed to the local auditor or assessor. Click hereto find contact information for local officials. The Department of Local Government Financeoutlines the incentive.

* Solar energy heating or cooling systems include solar energy systems used for domestic hot water and space heating, including heating of swimming pools, as well as industrial pre-heating.